by Dinah Adkins
Approximately 20 percent of North American incubation programs are sponsored by universities and colleges, so it should be no surprise that many have developed student incubators and programs. Even incubators that aren't operated by universities have started to focus on student entrepreneurs. Here we highlight two veteran student entrepreneurship programs in Indiana.
Located in Fort Wayne, Ind., Northeast Indiana Innovation Center has operated its Student Venture Lab for three years, although President and CEO Karl LaPan says investing in student ventures only began in January. Since student founders tend to work on their businesses part time, they are given six months to prepare an investment pitch and/or secure initial customer acceptance. If they're successful, they receive another six months to close external funding. NIIC provides incubator space and small living stipends ($600 to $1,200 per founder), permitting students to spend more time on their business. The incubator's seed investments in each venture include $2,500 in cash plus $3,000 in in-kind services for 3 percent equity. An additional $2,500 in cash and $3,000 in in-kind services are available for 5 percent equity. Students must apply for the additional funds, and LaPan and Student Venture Lab Program Manager Steve Franks decide whether the investment makes sense.
The Student Venture Lab has space for up to eight ventures, but students are required to reapply for the second six months. "We've shifted away from an entitlement program," LaPan says. To be allowed to continue in the incubator, students must demonstrate progress, currently by earning revenue or winning business awards. Lincoln Financial Group Foundation, Grabill Bank and Wilson Foundation provide the seed capital, while NIIC provides space and consulting expertise.
Indiana University's Kelley School of Business, Johnson Center for Entrepreneurship in Bloomington, Ind., has created The Entrepreneurship Lab to support student entrepreneurs, says Mark Long, IU entrepreneurship lecturer and clinical professor. Junior students majoring or minoring in entrepreneurship compete for program slots in a process called the IDEA competition. They apply, present their business concept and are screened based on the completeness of the concept. The winning 10 to 12 students, chosen by Long, enter the Entrepreneurship Fellows Accelerator immediately following the school year. There they undergo an intensive program of entrepreneurship immersion involving workshops; seminars; visits from entrepreneurs; and visits from angel investors, venture capital firms, banks and government officials. This program continues in the fall with free admission to the Hoosier Hatchery, the student incubator, and fall workshops, including weekend programs on various aspects of entrepreneurial ventures.
The program ends with a capstone course, "The Spine Sweat Experience," rated a Best Entrepreneurship Course in America in 2009 by Inc. magazine. "In this course, students finalize a full business plan during the semester, and at its end, present the plan to a panel of seasoned investors. If the students rate an 'A' on both the plan and the presentation, they get an investment and a free year in the student incubator. If they fail to make the grade, they get an 'F' and have to take another course during the summer semester to make up the academic credit. It's a true 'entrepreneurial experience' with consequences of risk versus reward – just like in real life," Long says.
Keywords: business plan – incubator, economic development, special focus incubator, venture capital, youth incubation
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